"Given the anticipated impact of last week's tragic events in New York and Washington on the entire travel and resort industry, coupled with demand already softened by a slowing economy, we believe postponing construction of the Caesars tower is the prudent thing to do," said Park Place President and Chief Executive Officer Thomas E. Gallagher.
"This is not the first time our economy and our industry have experienced significant disruptions. Both have always recovered well. But in the near term, delaying the Caesars tower project will conserve capital and preserve greater financial flexibility. It will also allow us to continue modifying and refining the project plan to deliver a high quality project while reducing the capital required and achieving greater operating efficiencies," said Gallagher.
Gallagher said Park Place will continue with construction of The Colosseum, a $75 million, 4,000-seat entertainment venue intended to endow Caesars Palace with a landmark state-of-the-art showroom. Located in the heart of the Las Vegas Strip at the corner of Flamingo Road and Las Vegas Boulevard, the new Colosseum project is well underway. The new venue is scheduled to open in March 2003 with an exclusive, three-year, one-of-a-kind theatrical presentation created by Franco Dragone (creator of "O" and "Mystere") and starring Sony Music recording artist Celine Dion.
"Park Place is committed to the Caesars brand and the Caesars properties," Gallagher said. "By proceeding with the world-class Colosseum, we will offer visitors to the world's gaming capital a brand new reason to visit and stay at Caesars, one of the world's most popular casino destinations."
When finally completed, the new Caesars tower is expected to feature 900 suites and mini-suites, as well as restaurants and retail space. The originally scheduled completion date was early 2004. While no final revised scheduled has been set, it is expected that the new tower project will not commence until after the completion of the Colosseum.
Park Place recently completed new facades for three of the original Caesars Palace towers, constructed a 49,000-square-foot interim event/exhibit pavilion, launched two new restaurants, remodeled 600 existing guest rooms, enhanced casino design elements and added two lavish new poolside villa suites. A larger new high-limit gaming salon is slated to open in December.
"Given the difficult short-term outlook that we see for the travel and resort industry as a whole, we're focused on making sure that our capital and operating expenditures are closely calibrated with the state of the economy and the travel industry," Park Place Chief Financial Officer Scott LaPorta said. "While the diversification of our company makes us less vulnerable to the impact of temporary conditions in any particular market, we feel that it's important, especially during this period of recovery, to maintain a high level of flexibility. For this reason, we're not initiating any new capital projects at this time, and we're looking at a number of ways to reduce our operating costs, including the reduction of our overall headcount through attrition."
Park Place Entertainment Corporation is the world's largest gaming company and owns, manages or has an interest in 29 gaming properties operating under the Caesars, Bally's Paris, Hilton, Grand Casino and Flamingo brand names, with a total of 2 million square feet of gaming space, more than 28,000 hotel rooms and 60,000 employees worldwide.
Additional information about Park Place Entertainment can be accessed through the Company's 24-hour investor relations service. Individuals may call toll-free 877-PPE-NYSE (877-773-6973) or visit www.parkplace.com to obtain the latest company news and stock price information, or to request information by email, fax or postal mail delivery.
Note: This press release contains "forward-looking statements" within the meaning of federal securities law, including statements concerning company plans, expectations and projections. The forward-looking statements in this press release are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed in or implied by the statements herein. Additional information concerning potential factors that could affect Park Place's future financial results is included in the company's annual report on Form 10-K for the year ended Dec. 31, 2000.